EV Charging Station Company Loses Partnership Bid, Sues Winner

  • As part of its diesel emissions settlement with the U.S. government, Volkswagen Group of America has pledged to spend $2 billion on electric vehicle infrastructure and education.
  • A provider of electric vehicle charging stations appears to have lost its bid to partner with Volkswagen and promptly sued the winning bidder for patent infringement.

ChargePoint, Inc., a leading provider of Electric Vehicle (EV) charging stations, appears to have lost a bid to provide charging stations to Electrify America and promptly sued the winning bidder for patent infringement. In a lawsuit filed December 15, 2017, in federal court in Maryland, ChargePoint accused SemaConnect, Inc. of infringing four patents directed to networked charging station technology.

Electrify America is a subsidiary of Volkswagen Group of America (VW). Electrify America was established as part of VW’s diesel emissions settlement with the U.S. Environmental Protection Agency. In the settlement, VW agreed to spend $2 billion over ten years on Zero Emissions Vehicle (ZEV) infrastructure and education programs. Electrify America announced plans last spring to partner with EV charging station companies to install and maintain at least 2,800 charging stations at more than 500 locations across the country.

From court documents it appears that Electrify America put out a request for EV charging station partners, and whittled the bids it received down to four finalists. After additional scrutiny, Electrify America selected three partners: SemaConnect, Greenlots, and EV Connect. ChargePoint, which may have been named as one of the four finalists, was not selected as a partner. SemaConnect’s portion of the partnership agreement includes the installation and maintenance of more than 1,400 charging stations.

ChargePoint seems to view the Electrify America program as a near-existential crisis, arguing in court documents that it will not be able to compete with the free Electrify America installations and will “permanently lose those customers who accept the [Electrify America] offer.” ChargePoint asserts that the selection of SemaConnect by Electrify America is effectively “supercharging” its direct competitor and allowing that competitor to “sell infringing goods and services on a massive scale.”

With these dire consequences in mind, ChargePoint requested that the court not only grant monetary damages but also take the unusual step of issuing an emergency injunction to prevent SemaConnect from executing the partnership agreement with Electrify America. A hearing on the emergency injunction was held just one week after the lawsuit was filed, but the court ultimately denied ChargePoint’s request. A written decision is expected to be made public in the next few weeks that will explain the court’s reasoning for denying the emergency injunction.

This case demonstrates some of the downstream effects of the massive VW diesel emissions settlement. In a relatively small market such as the EV charging station market (the entire market value for 2018 is estimated at $118 million), VW’s pledge to invest $2 billion through Electrify America may dramatically alter the market landscape. For ChargePoint, being left on the sidelines of the Electrify America project meant a potentially substantial loss of market share and revenue. In response, ChargePoint is attempting to use its patents to stop at least part of the Electrify America plan from being executed.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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